419. The changes
in the Civil Service over the last thirty years, and particularly
in the latter half of that period, have had the cumulative effect
of substantially altering both the nature and the extent of the
public sector. The Committee agrees with those witnesses who described
the changes as radical and as a fundamental revolution in public
administration. In later sections of this Report, we consider
the effects of these changes on particular aspects of public administration
and on the public service ethos. We address here our concerns
about the approach which has been adopted towards changing the
public service as a whole.

420. The question
of what is the proper sphere of Government is one of fundamental
importance which should be a matter of wide public debate. We
accept the evidence given to us that in the last three decades
there was little open or public debate about the extent of the
structural changes being made to the Civil Service. The desirability
of cross-party consensus in this area was stressed by Lord Callaghan
of Cardiff during the debate in the House of Lords on the privatisation
of Recruitment and Assessment Services (HL Deb, 8.3.96 col. 546).
The result is that, while justifications might be provided for
each individual change, no overall strategy or set of guiding
principles was worked out in advance. The absence of debate has
led to some measure of confusion and doubt, and the Committee
is not satisfied that the constitutional implications of the changes
were fully thought through before the changes were introduced.

421. The Civil
Service in the United Kingdom has been described as the envy of
the world. We draw attention elsewhere in this Report to its special
characteristics: lack of political bias, integrity, impartiality,
objectivity, loyalty and freedom from corruption. There has in
the last thirty years been a substantial reduction in the extent
of operations which are carried out under the auspices of the
Civil Service and in accordance with its ethos. Some of those
operations are now carried out in whole or in part by companies
in the private sector whose primary responsibility is to their
shareholders. It may well be that they can provide a better service
at lower cost, but the question whether a service should be provided
by the traditional Civil Service only, or by public bodies to
which powers are delegated or assigned, or by the private sector
is not simply a matter of management and efficiency, it is a matter
of public policy.

422. Dr Clark's
proposals for the future seemed to be directed to greater efficiency.
They were not, it seemed, related to the clarification of accountability,
the preservation of the Civil Service ethos, or the protection
of the unity of the Civil Service following the introduction of
agencies or the devolution of arrangements for pay and conditions
of service. It remains to be seen whether these issues are dealt
with the forthcoming White Paper.

423. The issue
of who should or should not be allowed to provide services in
the public interest (and otherwise carry out the functions of
Government) has become a matter of political debate. This is partly
because the Government, when transferring functions from the public
to the private sector, did not make clear which functions of Government
they were seeking to relinquish and which to secure; nor did they
offer any consistent rationale for the many ways in which Government
responsibilities were being devolved and dispersed. Justifications
for changes in the Civil Service were often couched in the language
of efficiency, effectiveness, service and value for money. The
concerns expressed about them tended to focus on responsibility
and accountability. We therefore recommend that any significant
change in the way in which public services are delivered should
be subject to open debate, and that Governments should seek Parliament's
views on prospective changes, even those changes which can be
implemented using the Royal Prerogative, and without legislation,
with a view to obtaining cross-party support.

424. This evidence
reinforces our earlier conclusion that there has been little or
no coherent rationale underlying the changes made in the Civil
Service in recent years. The Committee acknowledges that different
functions will always need to be carried out in different ways,
with different degrees of Ministerial or other control. Nevertheless,
in the absence of a codified constitution, it is particularly
important that the public should understand how the public service
works and what are the underlying strategy and guiding principles.
As it is, the evidence is that it baffles even some experts.

425. The Committee
entirely accepts that few aspects of public life in the United
Kingdom are easily susceptible to tidying up, but many of the
bodies we looked at are of fairly recent origin. It is not clear
which of the many types of body which now exist should be regarded
as an integral part of the Civil Service, bound by the Civil Service
ethos, apart from executive agencies, where those employed are
Civil Servants. Even in respect of executive agencies it is important
that their relationship to the core departments should be clearly
understood. Particular bodies should be constituted in particular
ways for particular, well-understood reasons. Above all, it should
be made explicitly clear in the case of each body which discharges
a public function how accountability to Parliament and to the
public is secured.

426. We conclude
on the evidence we have heard that the outcome of the changes
made over the last three decades has caused confusion. Given the
very large number and variety of public bodies which have come
into existence, we recommend that there should be a review to
establish some clear, easily understood common principles to guide
future developments of this kind.

427. Agencies
were introduced against a background of privatisation, contracting
out, the creation of internal markets within Government departments
and the proliferation of non-departmental public bodies. If, despite
initial doubts as to their precise status, we accept that executive
agencies remain and should remain in all important respects an
integral part of the Civil Service as a whole, the distinction
between them on the one hand and privatised and non-departmental
public bodies should have been made much clearer at the time,
and it should be affirmed now.

428. On balance
the Committee accepts that the creation of executive agencies
has not, in a constitutional sense, recast the architecture of
the state-so long but only so long as accountability of Ministers
to Parliament for the work of executive agencies remains the same
as their accountability for any other aspect of their Departments'
work.

429. Nevertheless,
the creation of the agencies has, in the Committee's view, contributed
to some structural division of the Civil Service. There is firm
evidence that the devolution to executive agencies of responsibility
for pay and conditions of work is contributing to a sense of disunity
in the Civil Service, and whatever the overall cost, the personnel
management cost is bound to be higher. The fact that the agencies'
budgets are subject to overall Treasury control means that in
practice it is unlikely that very significant differences can
develop between agencies, but the differences which already do
exist contribute to a sense of cultural fragmentation, and we
believe that such differences will continue to constitute a threat
to the unity of the Civil Service. Devolved responsibility for
pay and conditions has not fragmented the Civil Service yet: but
there is a need to take care to ensure that the new arrangements
do not fragment the service in the future.

430. We do not
believe the risks and implications of this division were properly
acknowledged or addressed as one structural change after another
was introduced. The changes of organisation could have led to
the fragmentation of the Civil Service. Indeed, some of our witnesses
consider that the Civil Service was fragmented by the changes.
We are not satisfied that, although divisions have taken place,
there has been what can really be called a fragmentation of the
Civil Service. Nevertheless, the real danger that such fragmentation
could happen should be considered before any further structural
changes are made. It is not safe to assume that a single strong
ethos and a sense of shared loyalty to a unified service can without
conscious effort be maintained across a wide range of differently
constituted and geographically dispersed bodies. Most private
sector organisations are well aware of this and devote considerable
effort and resources to maintaining their corporate identity and
fostering pride in it amongst their employees. Ministers and senior
officials need to do the same-as was accepted by our witnesses.

431. The Committee
recommends that the Minister in charge of the Office of Public
Service should be given explicit responsibility for maintaining
the unity and standards of the Civil Service and for monitoring
the effect on them of any structural change.

432. There is
a likelihood that, when outsiders are brought in to top positions,
existing officials will individually be disappointed by the effect
on their promotion prospects. We have not had evidence that this
so far has had a generally harmful effect on either ethos or morale.
There may, however, be a risk of such a harmful effect if a disproportionate
number of top jobs are filled by external recruits.

433. The Committee recognises
that the modern Civil Service is a profession of people who will
not necessarily stay there for the whole of their careers. In
a country where officials "carry around the constitution
in their own minds" a strong element of continuity is, however,
highly desirable in the Civil Service. This continuity may be
threatened by over-use of recruitment from outside and the use
of fixed term contracts. The Committee therefore considers it
to be essential for Government, in pursuing these policies, to
look to the future, and to have regard to the impact of them on
the morale of Civil Servants, the collective memory of the Senior
Civil Service, and the political impartiality of Senior Civil
Servants. The Committee agrees with Dr Clark's view (notwithstanding
his view that the use of short-term contracts is the only way
to deal with an irregular workload) that such short-term contracts
should be used to the absolute minimum.

434. The balance
of the evidence which the Committee received suggested that the
creation of agencies had not had an adverse impact on the interchange
of staff. Opportunities are, if anything, wider than before, as
officials now have the chance to gain experience in executive
agencies as well as the core departments. The Committee takes
the view that such interchange is of vital importance to the overall
unity and coherence of the Civil Service. We therefore recommend
that interchange of staff within and between departments and agencies
is a matter which should not be left to chance, but which should
be fostered by the Head of the Civil Service, and made one of
the explicit responsibilities of the Minister in charge of the
Office of Public Service.

435. The Committee
considers that if the Civil Service is made up of a large number
of small administrative units, then care must be taken to ensure
that all the parts work together for the good of the whole. The
Permanent Secretaries who gave evidence to the Committee were
all able to describe measures in place in their departments designed
to ensure intra-departmental co-ordination. The Committee has
no reason to believe that the establishment of agencies has had
an adverse affect on the co-ordination of policy within
departments.

436. Co-ordination
between departments is another matter. The Committee is
concerned by the evidence given by Sir Christopher Foster and
Mr Francis Plowden about the decline of Cabinet committees and
decreasing consultation of officials under successive Prime Ministers.
The question of co-ordinating policy between departments is not
a new one, and the Committee can only draw attention to the constitutional
importance and inherent good sense attached to the consultation
of officials when inter-departmental issues are discussed.

437. The Committee
notes that it is a specified objective of the Office of Public
Service to "maintain the essential coherence of the Civil
Service while securing the benefits of devolution and management
delegation". The Committee considers that overall monitoring
of changes in the Civil Service is of the greatest importance,
in order to ensure that there is some consistency of approach
in changes made in different parts of the Civil Service, and to
ensure that proposed structural changes are based on adequate
information and that they reflect an overall, well-planned strategy.

438. We recommend
that a Civil Service Act should include a requirement for the
Government to report annually to Parliament on the recent and
proposed structural changes to the Civil Service. We further recommend
that whenever such a report is received, it should be referred
to a Select Committee set up for the purpose of considering it.
We think it desirable that the Government's Report, together with
the Committee's Report on it, should then be published together
with a recommendation as to whether the Committee's Report is
made for information or debate.

439. The Committee
concludes that beyond the most basic functions of passing laws
and ensuring an independent judiciary there cannot be said to
be an agreed definition of what functions must, as a matter of
principle or of practicability, remain within the public service.
In the absence of a codified constitution that is perhaps inevitable;
but the question of the irreducible minimum remains important
because many of our witnesses felt that the Civil Service had
been undergoing a process of erosion. Since the erosion seemed
to be proceeding rapidly, but apparently with no single fully
articulated underlying purpose, the question naturally arose about
where it might stop.

440. There is
no doubt that some witnesses have felt that there was unease and
concern about the changes which have been made in the Civil Service.
It seems to us that the failure to draw a clear boundary around
and explain the process of change has contributed to the uncertainty
and feeling of insecurity alluded to by some of our witnesses.
Nobody knew where the process would stop, or why. The absence
of a clear scheme of underlying principle to explain and justify
the changes added to the anxiety. These are matters which we have
already raised in this Report.

441. The Committee
acknowledges that it is far from simple to draw a boundary around
the irreducible core of Government. To do it, it is necessary
to consider what is the proper sphere of Government-a debate which
has engaged both those who govern and the governed down the ages.
It is nevertheless important that in a mature democracy it should
be a matter for open and public debate and an issue in which Parliament
should take a keen and vigilant interest. The question of what
is the core of Government is as much a matter for the governed
as for the governors. It seems to the Committee that it is desirable
that the Government should produce its own concept of the irreducible
core of functions which must be carried out by the core Civil
Service, not least so as to allay the fear that there may be further
erosion of the Civil Service in the future.